Nandan Nilkani defends Infosys management
Defending the company's co-founders and management over the recent whistleblowers’ allegations, Infosys Ltd chairman Nandan Nilekani on Wednesday said even God can’t change the numbers of this company. Nilekani also assured the necessary steps will be taken if an investigation substantiates claims of misgovernance. Commenting further, Nilekani said he was committed to the highest standards of corporate governance and has responded responsibly and complied with applicable laws and best practices.
“Infosys has strong processes; even God can’t change the numbers of this company. Our finance team is feeling insulted by these allegations. But I don’t want to bias the investigation," Nilekani, a co-founder of the company, said at an analysts’ meet.
He added that Infosys has grown at an average of 11.4 per cent in constant currency terms over the past four quarters, with CEO Salil Parekh playing a lead role in reinvigorating the organization and driving momentum.
He added that he will wait for the investigation report to come in. Nilekani said it was "business as usual" for the company in spite of the latest "distraction".
“Customers are extremely supportive... Customers have faith in Infosys... deal flow continues to be as good as ever,” Nilekani said adding that the Board is fully supportive of the management team that is driving the company's strategy execution.
In his opening remarks, Nilekani said the investigation process that is currently going on will allow the company to determine the validity of complaints.
"Should an investigation substantiate the allegations of a complaint, the company promptly undertakes remedial steps and makes disclosures if required. Infosys’ response to the recent whistleblower allegations adhered to the company policy and past practices, and complied with all applicable laws and regulations," he said.
He emphasised that contrary to reports, the company had acted responsibly in response to the complaints. In October, Infosys had informed the stock exchanges of having received anonymous whistleblowers' complaints alleging certain unethical practices by the top management.
Nilekani, at that time, had said the whistleblower complaint dated September 20, as well as an undated complaint had been received by one of the board members on September 30.
What is the issue surrounding Infosys?
In the letter, dated September 20, and signed by 'Ethical Employees', it was alleged that CEO Salil Parikh as well as Chief Financial Officer (CFO) Nilanjan Roy engaged in forced revenue recognition from large contracts not adhering to accounting standards.
The complaints were placed before the audit committee on October 10, and to the company's non-executive board members on October 11, also the day when Infosys announced its second-quarter results.
Events following the letter
Infosys roped in an external law firm to conduct an independent investigation into the allegations and has stated that the outcome of the investigation will be shared with all stakeholders at the relevant time.
International repercussions: The US market regulator SEC initiated a probe into the matter, while Rosen Law Firm had said it was preparing a class-action suit to recover losses suffered by Infosys investors in the US.
Domestic Repercussions: Back home, the Securities and Exchange Board of India (Sebi) had sought additional information from the company while the National Financial Reporting Authority (NFRA) - part of the Corporate Affairs Ministry - as well as the Registrar of Companies, Karnataka, have sought information from Infosys on the matter.
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